Do remittances improve income inequality? An instrumental variable quantile analysis of the Senegalese case

Agwu, George Abuchi; Yuni, Denis Nfor; Anochiwa, Lasbrey

doi:10.1111/imig.12414

Cited by 14 publications

(5 citation statements)

References 51 publications

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“…Controlling for endogeneity in the access to migration, households receiving remittances spend more than similar households not receiving remittances by an economically important and statistically significant margin at virtually all levels of the distribution. This underscores the crucial role of remittances as a vehicle for alleviating poverty in Nigeria, consistent with what has been observed for other sub-Saharan economies like Ghana (Adams & Cuecuecha, 2013), Ethiopia (Beyene, 2014), Kenya (Bang et al, 2016), and Senegal (Agwu et al, 2018).…”

Section: Empiricssupporting

confidence: 87%

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Hollowing out the middle? Remittances, poverty, and income inequality in Nigeria

Bang

Mitra

Wunnava

2022

Migration and Development

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This paper investigates the impact of remittances on poverty and inequality in Nigeria. In contrast to the existing literature, our methodology of instrumental variable quantile regression (IVQR) explicitly demonstrates the differential marginal impact of remittances for households at different levels of the conditional expenditure distribution. In tracing this heterogeneous impact, we are further able to address the effect of remittances on poverty and inequality simultaneously in one econometric model. Our results based on the Nigerian Migration Household Survey 2009 show that remittances reduce poverty by increasing household expenditures reveal a positive marginal impact of remittances at all but the highest quantiles of the conditional distribution of household expenditure, with the impact being the greatest up to the 12 th quantile. While this unambiguously supports the poverty alleviation role of remittances documented in the literature, the distributional impact is more nuanced: The marginal effect of remittances follows a U-shape over most of the household expenditure distribution, which suggests that remittances may 'hollow out' the middle class. Specifically, households lying between the 13 th to the 35 th quantile gain less from receiving remittances than households on either side of this range.

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Section: Empiricssupporting

confidence: 87%

“…2016) is the first study to use the method to analyze household level survey data from Kenya. IVQR has since been applied by Agwu et al (2018) to the Senegalese context. Also see Bui and Imai (2018) for an application of quantile regression to the context of internal migration in Vietnam.…”

Section: Discussionmentioning

confidence: 99%

Hollowing out the middle? Remittances, poverty, and income inequality in Nigeria

Bang

Mitra

Wunnava

2022

Migration and Development

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“…The reason for the ambiguous impact of remittances on income inequality is that inequality will increase if remittances are skewed in favour of high-income households (Azizi, 2021) and income inequality will decrease if remittances are skewed in favour of low and middle-income households (Agwu et al, 2018). As our study context is related to LMICs, we hypothesise that remittances reduce income inequality.…”

Section: The Nexus Between Remittances and Income Inequalitymentioning

confidence: 95%

“…will increase if remittances are skewed in favour of high-income households (Azizi, 2021) while inequality will decrease if remittances are skewed in favour of poor and middle-income households (Agwu et al, 2018).…”

Section: Mediation Analysismentioning

confidence: 99%

Migrant Remittances, Income Inequality and Energy Poverty: A Pseudo Panel Approach

Wijayarathne,

Hassan,

Holmes

2023

Preprint

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Energy poverty is a widespread issue that prevents billions of people from accessing affordable, modern, and eco-friendly energy services. Energy poverty is difficult to alleviate because it is directly related to income; as a result, low-income households use more solid fuels, which harms human health, educational quality, and well-being. This will further reduce the income of low-income households and increase the income gap between low and high-income earners, resulting in income inequality. Therefore, income inequality would be the major impediment to eradicating energy poverty. Income inequality in developing countries is now highly influenced by foreign exchange earnings, particularly migrant remittances. As a result, migrant remittances would be a significant source of reducing income inequality and, thereby, energy poverty. Therefore, this study investigates the impact of migrant remittances on energy poverty and the mediating effect of income inequality on this relationship. The data comprises the four waves of the Sri Lankan Household Income and Expenditure Survey from over 84,000 households. An instrumental variable approach was used to address the endogeneity of remittances. The empirical analysis entails two-stage least squares (2SLS) and instrumental variable mediation analysis. Our key results suggest that a 10% increase in migrant remittances reduces energy poverty by 0.042 units, while income inequality significantly mediates this relationship. The findings have significant implications for policymakers and stakeholders interested in reducing income inequality and energy poverty. JEL Classification: C36, D63, F24, I32, O15

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“…Observing the sample in this study reveals that cash transfers are white noise and show no mass observations (Figure 1a); this is why we use the money transfer variable as a processing variable (d) following the arguments of Bang, Mitra, and Wunnava (2016) and used by Agwu, Yuni, and Anochiwa (2018). The useful variation in the remittance variable can be captured depending on whether the household has access to it or not.…”

Section: Instrumental Variable By Quantilementioning

confidence: 99%

Comparative analysis, cash transfers, household investment and inequality reduction in Togo

Sodokin

2021

Applied Economics

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This paper explores the impact of domestic and international cash transfers on poverty and household resilience in Togo from a comparative perspective. The paper uses data from two household surveys (The Unified Questionnaire of Basic Well-being Indicators) conducted by the National Institute of Statistics Economic and Demographic Studies of Togo in 2011 and 2015. The analysis uses the propensity score matching method and the quantile instrumental regression. The first category of results shows that migrants' external and internal remittances positively affect poverty and inequality and improve households' investments in Togo. The second category of results allows concluding on the implications for public policy in a time of pandemic shock, such as the Sars-Cov-2 one.

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Do remittances improve income inequality? An instrumental variable quantile analysis of the Senegalese case

Cited by 14 publications

References 51 publications

Hollowing out the middle? Remittances, poverty, and income inequality in Nigeria

Hollowing out the middle? Remittances, poverty, and income inequality in Nigeria

Migrant Remittances, Income Inequality and Energy Poverty: A Pseudo Panel Approach

Comparative analysis, cash transfers, household investment and inequality reduction in Togo

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